Market technician Dave Chojnacki of Street One Financial recaps Tuesday’s big equities rally and updates the important technical levels for investors and traders to focus on as the end-of-quarter window dressing continues on Wall Street.

The markets opened flat on Tuesday, but after a great Consumer Confidence number, equities exploded to the upside. At the same time, there was word from Washington that Health Care may not be dead, and the administration is also working on Tax Reform and Infrastructure.

Traders liked this talk, and moved the major indices higher throughout the day. The NDX traded above its recent closing high, but remained below its record intraday high of last week. By the final bell, the averages ended with moderate gains in the session. The DJIA also ended its 8 session losing streak.

At the close, the DJIA and SPX gained 0.73%, and the NDX moved up 0.64%. Breadth was decidedly positive, 2.75 to 1, on above average volume. ROC(10)’s advanced, with the DJIA and SPX remaining in negative territory. The NDX advanced and crossed into positive territory.

RSI’s moved higher with the DJIA and SPX in the low 50’s, and the NDX at 62.1. All three major averages remain with their MACD below signal. The ARMS index ended the day at 0.82, a slightly bullish reading.

Once again, we see the averages trading within technical levels. The major indices have been bouncing around moving averages and their Bollinger Band. The NDX, which is the strongest index near term, traded above its record closing high of 5416 in the session, but closed just 9 points below. It moved above its 20D-SMA of 5378 in the session.

The DJIA and SPX both held their 50D-SMA’s in the session, 20478 and 2333, respectively. They both remain below their 20D-SMA’s of 20843 and 2367, respectively. Near term, they are weaker than the NDX, and may use yesterday’s session to rebuild after the recent weakness.

Meanwhile, the VIX fell 8% to 11.49 in the session. Volatility has not been able to see a sustained rally in quite some time.

Near term support for the NDX is at 5400 and 5375. Near term resistance is at 5416 and 5425. Near term support for the SPX is at 2350 and 2333. Near term resistance is at 2367 and 2375.

Europe is mixed in early trade, and U.S. Futures are lower in the premarket. In terms of major economic reports on tap today, we’ll see the Pending Home Sales data at 10:00am and Crude Inventories at 10:30am.

The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) fell $0.13 (-0.06%) in premarket trading Wednesday. Year-to-date, DIA has gained 4.68%, versus a 5.27% rise in the benchmark S&P 500 index during the same period.

DIA currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #5 of 74 ETFs in the Large Cap Value ETFs category.

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Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, David Chojnacki, does not endorse or recommend any issuer or security mentioned herein.

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